How to abolish the NHS

Richard Wellings

23 January 2012

The National Health Service enjoys strong support among the public, making it almost impossible to introduce radical reforms, even if the performance of the NHS is relatively poor compared with systems in other developed countries. Over the last thirty years reform efforts have therefore focused on greater private sector involvement within the NHS system and the deployment of some internal market-style mechanisms in an attempt to improve efficiency. In a recent initiative, for example, a private company has been contracted to manage a ‘failing’ NHS hospital.

The problem with such ‘part-privatisations’ is that they typically involve complex contractual arrangements and the creation of numerous ‘interfaces’ between government bureaucrats and the private sector, which may result in increased transaction costs and a reduction in overall efficiency. At the same time, private firms working within the NHS framework remain constrained by a strict regulatory framework on top of rigid contractual commitments. There is therefore little scope for the entrepreneurial discovery and innovation that brings such enormous gains within genuinely free market arrangements.

Moreover, since politicians and officials retain control over funding, the system remains unresponsive to consumer preferences and subject to capture by special interests, particularly producer interests such as the medical and nursing professions and the pharmaceutical industry. Mixed public-private systems therefore risk introducing additional transaction costs while suffocating the potential gains from private sector entrepreneurship. If this results in disappointing outcomes, as is likely, the whole concept of privatisation may be brought into disrepute.

There is therefore a strong case for taking a different approach. Rather than focusing on the gradual introduction of ‘market reforms’ and public-private partnerships within the NHS system, an alternative strategy would seek to bypass the NHS by liberating the private healthcare sector such that the NHS became less and less relevant as more and more people opted out of state provision to avoid long waiting lists and substandard care. This option has the potential to create a virtuous circle – by reducing burdens on the NHS, taxes could be cut, wealth created, and more people would be able to afford private healthcare, reducing the NHS burden still further and gradually undermining its political base.

But radical regulatory reform is necessary if a dynamic private health sector offering low-cost, high quality and innovative treatment is to emerge. A selection of regulatory changes is suggested below:

Perhaps most importantly, the compulsory licensing of medical professionals should be abolished. Anyone should be at liberty to practice as a doctor or nurse, with patients relying on brand names or competing voluntary associations to ensure quality. Ending current restrictive practices is essential to enable private firms to increase productivity in the sector.

Restrictions on the types of treatment available ‘over the counter’ should be lifted to enable patients to obtain medication without recourse to registered doctors and regulated pharmacies.

Burdensome drug licensing regulations should be rescinded. Instead, the testing of new drugs should be left to private firms and free markets. Reputable companies would have strong economic incentives to ensure the safety of their products, while there would also be far more freedom for experimentation and innovation by new market entrants, with huge potential benefits for patients.

Prohibited recreational drugs, such as cannabis and opiates, should be legalised to allow the sick to benefit from their numerous medical applications.

Some form of tax rebate could be introduced for patients choosing to opt out of NHS treatment (see, for example, this study from the Adam Smith Institute).

Private firms should be free to bring in low-cost medical professionals from abroad and at liberty to determine rates of pay and working conditions through private contract.

Legal reforms could enable patients to waive their right to clinical negligence claims.

Planning controls and building regulations should be liberalised to enable the rapid development of new private healthcare facilities.

Finally, it should be noted that internet technology has mitigated many of the information asymmetry problems that have previously been cited as a rationale for heavy state regulation of health. A combination of new technology and a dynamic, entrepreneurial private health sector could make the NHS increasingly irrelevant.

Carriage returns never show up on here. Would make all our posts easier to read. :-)

Submitted by HJ on Fri, 17/02/2012 - 18:20.

Andrew Wilson -
You are clearly unaware that the OECD looked at medical outcomes, and found the NHS wanting. And if the medics and nurses in the NHS are running around being as efficient as you claim, then why did the OECD find the NHS to be so inefficient? It can only be the system in which they are working.

Submitted by Andrew Robertson on Fri, 17/02/2012 - 18:43.

The people who are trying to push through the bill and many of the Lords who are in favour of the bill have financial interests to companies that will benefit from the increased privatisation. My assumptions are based on all the stories out there that have revealed the conflicts of interests to the bill being passed. A lack of regulation is a door open to disaster. Humans cannot be trusted I am afraid and if they are not regulated, then humans will take what they can and screw the rest. It encourages selfish and greedy behaviour. Bloomberg is estimating the amount of American's without health insurance to have risen up to 52 million because of mass unemployment. Directly linked to not being able to afford it.
I relate to the U.S system because the Conservative party have been fawning the U.S for some time - a different system but for how much longer. Despite your protests that my argument is paper thin, you yourself provide no evidence whatsoever that an unregulated free market system would be more efficient and coordinated. As I said, we only have to look at Lehman bros and Enron to know what happens when people are not regulated or regulators are not capable of regulating.

Submitted by HJ on Fri, 17/02/2012 - 18:59.

Andrew Robinson - so you admit that your carping on about the USA is irrelevant because nobody is proposing anything like their 'system' here. And the US system is highly regulated - so why do you not approve of it?
Incidentally, if humans cannot be trusted if they are not regulated, then who do you think should be regulating them. Aliens? Deities?
Of course, the BMA couldn't be defending the current system because its members do so nicely out of it, could they?

Submitted by Wlancsgp on Fri, 17/02/2012 - 22:25.

Hilarious article. How will the "consumers" know if they are getting a product that is needed. Eg a patient presents with a sore throat, Dr decides no treatment needed, pt demands antibiotic. Under your neoliberal system such a pt will end up being treated even though it's not necessary. Result increased costs, side effects and drug resistance

It would be comforting to know that this whole post is a ridiculous, magnificent, and yes, hilarious wind-up. However My Black Cat is taking it all very seriously and is spitting, arching her back, and wafting her tail ferociously. Worse still, she is so upset that she has stopped hunting rats for The Cauldron.
Could Mr Wellings please reassure My Black Cat that his post is indeed a spoof so that The Witch Doctor can get on unabated with her entrepreneurial work in The Spell Pantry? If it is a spoof then perhaps he could also tell us why he wrote it?

Submitted by Simon Murray Wells on Sun, 19/02/2012 - 02:37.

It is important not to lose sight of the basic principle. It is surely incontestable that the reason why NHS hospitals (though not commonly excellent GPs on a one-to-one basis) routinely treat patients either as if they are sheep to be corralled or slightly mentally-retarded 10-year olds; why nurses too frequently lack devotion to or vocational interest in their work; why the food - that imperative for morale and recovery - is poor, and why everyone thinks it is somebody else's job to scrub the pipes or the skirting board is the plain fact that he who pays the piper does not do so directly and therefore does not call the tune. Of what use is it for patients to assert that mixed wards are a scandalous disgrace and that they will certainly refuse to patronise them? Humans respond well to incentives. They also respond quite well to disastrous consequences for falling down on the job. Soviet-style healthcare clinically, carefully and deliberately removes all the incentives for top-quality service and good behaviour. C'est tout, mes amis. It's not good enough.

Submitted by Simon Murray Wells on Sun, 19/02/2012 - 03:14.

Of course it is not quite 'tout'. there is another consideration. If you look at the debt and the demographics, we can't afford it. Not remotely. It's history. Frankly I shudder to think what will happen when the bond market finally wakes up and takes a close look at the UK although the Greeks are giving a clue: action on spending which will not avoid civil unrest and depression. We should probably try to get ahead of it and the NHS is the obvious place to start. Whether populist politicians are actually capable of explaining that to a public greedy for entitlement and flabby with irresponsibility is another matter. They have not been yet. Austerity, for the record, is taking a candle to bed and boiling the chicken carcase for broth. (Excuse me? What chicken carcase?)

Submitted by Anonymous on Sun, 19/02/2012 - 14:56.

I am honestly shocked and appalled after reading this article and its comments, yes the NHS isn't fiscally perfect but its the largest free healthcare services in the world and as a whole gives a good service to everyone. yes you can get better quality service from the private sector if you can afford to, but many people cannot. if the NHS was completely privatised millions would suffer if not die as they simply cannot afford to get treated.

Submitted by Julie on Sun, 19/02/2012 - 15:25.

Well, if you want to know what has happened with hospital cleanliness, you need look no further than outsourcing the work to private firms. In my neck of the woods, private cleaners wouldn't clean up bodily fluids, which ain't a hang of a lot of use in a hospital. Hence the nurses had to clean the wards instead of the cleaners as well as trying to ensure their patients didn't flatline. A profit for the private firm; a waste of money and increased infection for the NHS.

I have been in sufficient PFI/PPP run NHS Hospitals as quality assurance / Clincal governance consultant and auditor has brought me to understand entrepreneurship is not the answer to the problems that beset the NHS in England nor are such entrepreneurial ideas as PFI/PPP in the slightest efficient or cost effective - in fact the very opposite. Current research indicates that the entrepreneurial PFI/PPP model is 6x more expensive than traditional models of NHS building, maintenance and operating methods over the 25 year operating period (Edniburgh University Department of Public Health).
The problem in the NHS is down to poor management of resources (both human and fiscal) and repetitive applications of 'market forces' in a manner inappropriate to health care for political reasons, not to meet an established patient need or expectation. This article is yet another example of the impoverished thinking of neo-liberal capitalism and the irrationality of this approach which is yet another top down proposition that will fall upon stony ground and cause more harm than good.
Most of the inefficiency and in effectiveness prevalent in the NHS has its origin in Richmond House and the politicians of all classes who work there - Westminster, Civil Service and Medical - who tend their own little empires and fiefdoms to protect - that is before you add in all the other vested interest who have the ear of any of these three - pharmaceutical companies, Medical Royal Colleges, Quangos and think tanks (like yourselves) who have the ear of here today, gone tomorrow Health Ministers. All this is reflected in the prescient comment one consultant said to me; Never has so much much been measured by so many for such little patient benefit.
There is a way to improve NHS England's effectiveness - it is not a commercial model or latest neo-liberal economic or bampot political theory it is to focus on meeting patients needs and expectations using proven quality assurance methodologies on medical treatment, the logistic, management and financial train required to support them and not the political hodge podge, anal control freakery management style and compromises currently in play.
It will never happen because it would mean taking control and power out of the hands of the politicians of all stripes in Richmond House - the biggest vested interest of all.

Submitted by Ben on Mon, 20/02/2012 - 11:33.

Reading this article and many of the comments beneath it has utterly depressed me. However, of all the comments, Simon Murray Wells opining that a "public greedy for entitlement and flabby with irresponsibility" should be persuaded to give up their NHS had me fuming. In this neo-liberal parallel universe it's the proles who are 'greedy' for expecting to be taken care of when they fall ill, while the private companies (that would stand to make big profits once the NHS had gone) are presented as paragons of virtue, with only the interests of the patient in mind. I don't think so.

Well, Ben, these words "public greedy for entitlement and flabby with irresponsibility" uttered by Simon Murray Wells make My Black Cat fume too, and they make The Witch Doctor stir The Cauldron furiously while incanting the most powerful and obnoxious of spells.
What the Murray Wells of the world do not seem to understand is that the NHS is a complex organisation that cannot be managed in the way that shoe shops, telephone shops and specs shops are managed. These are very simple businesses compared to healthcare where those central to the service are neither customers nor clients. This witch has not lost sight of the "basic principle" referred to by Simon Murray Wells. The basic principle can be defined by one word – “patient.”
Much of the degeneration in the NHS dates from about 1984 when patients were renamed clients, hospitals competed with each other, and chief executives whose management skills related to shoes, telephones and specs were installed.

However, in spite of the serious tone of some of the post and the comments, The Witch Doctor still finds it difficult to believe this weird offering that we are reading is anything other than a spoof. My Black Cat is waiting patiently to hear from Richard Wellings that this is in fact a wind-up and that he has a great sense of humour.
Anyway, who could trust an outfit that can’t even allow commenters to divide text into paragraphs, to advise on running or even dismantling the NHS?

Submitted by Simon Murray Wells on Wed, 22/02/2012 - 02:09.

If I wrote immoderately and was guilty of the online disinhibition effect, I certainly apologise. Nevertheless, my central points remain: it is the patient who needs to be able to insist on high standards, while it is obvious that expectations of what the state can afford as a safety-net in future must be dramatically reduced. I think I will end my contributions on those unassailable points on which - presumably - we can all agree!

Submitted by Richard Wellings on Wed, 22/02/2012 - 11:39.

@madjockmcmad - PPP/PFI is the kind of corporatist, heavily regulated initiative that is criticised as inefficient in the original post. There is very little scope for entrepreneurship under the terms of such agreements. And clearly you are correct that there is a problem in the NHS with endless interference from the centre - another good reason to move to a voluntary healthcare system based on freed markets.

@Ben - Charities and cooperatives etc. would be at liberty to provide heathcare in a freed market. In all likelihood (and the historical record supports this assertion), a wide range of options would be available to patients. It's also important to point out that private companies don't operate in a moral vacuum.

Submitted by Susanna on Mon, 27/02/2012 - 23:05.

The production of final clinical trial reports is internally regulated but the pharmaceutical industry is not obliged to show the data to anyone to have it vetted.
Of course there are rules but they are unenforceable. It is all done on trust.
The flour makers used to put lead oxide in flour to make it look whiter. But we don't need regulation.

Submitted by Anonymous on Thu, 15/03/2012 - 18:20.

Is the author of this piece feeling ok? - Did I just read:
Perhaps most importantly, the compulsory licensing of medical professionals should be abolished
or has somebody slipped something in my tea this afternoon.

Submitted by Mus on Thu, 15/03/2012 - 18:27.

Who paid for this report? Why won't the IEA reveal its funding sources? Why should we trust anything they say if we don't know who's paying for it?

Submitted by fs on Thu, 15/03/2012 - 19:04.

In many developing countries, you can buy any medicine over teh counter, in fact if not in law. Hence why more and more illnesses cannot be cured. Overuse by self-medicatiton of e.g. antibiotics leads to this. But let us all die of simple infections as long as the market is free!

Submitted by HJ on Thu, 15/03/2012 - 23:50.

Anonymous - yes, as Milton Friedman demonstrated, compulsory licensing of medical professionals raises prices (and therefore reduces availability) and lowers the overall quality of medical provision. Licensure is used by vested interests to exploit the public.
Every day of your life, you rely on goods and services produced by unlicensed people for your health and safety. Aerospace engineers don't have to be licensed - do you feel unsafe when you get on a plane?

Submitted by Anonymous2 on Fri, 16/03/2012 - 00:27.

Well, the article is not dated 1 April, so I can only assume it is inspired by the insightful journalism of the kind reported in The Onion.
These proposals, if they ever became reality, would indeed get rid of the NHS. Sadly, (and I think this is Mr Wellings' point) this is the general direction our current government is taking us.
For those who take this article seriously, let's take Mr Wellings' point on drug deregulation to its logical conclusion. Just hypothetically a new market entrant comes up with a drug which seems to be an effective tranquiliser and antiemetic. There are no pesky regulations to limit the use of this innovative and exciting drug, so it is also prescribed to pregnant women to prevent morning sickness.
Just to continue with the hypothetical story, once pregnant women find out that the drug will cause birth defects, they can exercise their patient consumer preference, and choose an antiemetic drug that will not cause birth defects, thus driving innovation and quality.
As the unfortunate women who took this drug while pregnant have waived their right to sue (and the waiver was carefully worded to include the unborn children), the government will step in to bear the expense of caring for babies with severe birth defects, leaving the drug company free to continue innovating and providing consumer value (although next time with a different drug).
See, free markets solve everything!
Of course the real consequence to the tragedy of thalidomide was the strict regulation of drugs before they are allowed to come on the market to be sold to pregnant women.

Anonymous2 - The CAA does not license the engineers that design the planes you fly. That is a reference to 'flight engineers', i.e. flight crew.
As I made clear, every day you rely for your health and safety on people who are not state licensed. Would Rolls-Royce and Boeing (for example) produce safer equipment if their staff had to be individually licensed? This is not to say that people shouldn't be trained and qualified, just that government, through licensure, is not best placed to decide on what is appropriate. In this country, once a medic completes his/her medical training there have generally been no further checks - they can be licensed for over 30 years. Does this ensure competence?
I suggest that you Google "Milton Friedman Medical Licensure" to read a summary of the argument but, of course, he wrote a whole thesis on the subject.
As for drugs, why do you assume that people have waived their rights to sue if they use them? Why do you assume that drug companies are unconcerned for their reputation? There is a balance of benefits and risks in the use of any drug and you have failed to explain why state licensing is the best solution. Thalidomide was state licensed in this country, by the way.

Submitted by Anonymous2 on Fri, 16/03/2012 - 17:27.

@HJ I don't think "aerospace engineer" refers to flight crew: "Aerospace engineers work on the development of aircraft and related technology" (same website).
The waiver hypothetical above incorporates one of Mr Wellings's suggestions: that patients be allowed to waive suits for clinical negligence. The first thing that drug companies would do if this were allowed is to make use of the drug contingent on a waiver by the patient.
As for the drug companies, their first objective is to make money. They can and do market drugs for inappropriate uses, and downplay very serious side effects. This is especially true in the United States. Google zyprexa and FDA fines. The fine was $1.4 BILLION. Sadly for patients, the drug companies write fines like this off as a cost of doing business. What really needs to happen is the US needs to outlaw drug marketing to consumers, just like is done here. We need very strict regulation, not a free market. Otherwise what you have is some patients suffering until word gets out about problems. While consumers can then exercise choice (maybe), the patients who did not have this information as an initial matter are the ones suffering. They need to be protected, and strict, proper regulation will do this.
I have taken a look at an excerpt containing Milton Friedman's on licensure here http://www.fff.org/freedom/0194e.asp and it looks to me like he is expressing a personal opinion based on his academic conjecture. There is a lot of talk about trade unions, which he doesn't like. He does not present any actual evidence in this excerpt to support his view on licensure and quality.

Submitted by HJ on Fri, 16/03/2012 - 19:03.

Anonymous2 - I started my engineering career working in an aircraft factory. Trust me, aerospace engineers do not have to be licensed. Do you use a car? Do the people who design the safety systems in a car have to be state licensed?
Milton Friedman wrote a PhD thesis on medical licensure and examined the case in great detail precisely because he found that the strongest case was in the field of medicine. He concluded that it worked against the public interest.
You assume that without state licensing, drugs would just be forced on people willy-nilly. In fact, companies would need to demonstrate efficacy and safety otherwise it would be very difficult to persuade people to use them. They'd have to explain side effects. Licensing just leads people to assume that they're safe. Organisations whose reputation depended on testing drugs for efficacy and safety would emerge. This is a far greater safeguard than state licensing - nobody stands to lose their own money and livelihood if they're part of a statutory state system.

Submitted by Julie on Fri, 16/03/2012 - 19:23.

Well the talking is soon going to be over. NHS PLC is upon us folks, as the final reading of the Health and Social Care Bill goes through. I hope all of you that have waxed lyrical about private care will remember your part in the debate, when you find out BUPA won't do your operation because it's too risky and expensive and the NHS can't because it's been stripped of its services and staff. Will the last person out of the hospital ward please put the lights out?

Submitted by Anonymous on Fri, 16/03/2012 - 22:45.

As I see it, if these private companies could compete on a level playing field by building their own facilities and producing inspired, innovative solutions, like in the old days of UK private enterprise, then ok - let them work in parallel to the NHS with no public funding, and provide to whoever can afford it at market prices, WITHOUT stealing NHS facilities. The thing is they can't compete and pay shareholders and greedy managers and venture capitalists. It's these latter who want to muscle in on the NHS.

Submitted by Anonymous2 on Sat, 17/03/2012 - 00:45.

@HJ. Ok, lets assume that licensure does not guarantee quality and safety. Neither does the free market. As I understand it, the free market works by providing patient choice based on information available about the performance of providers in the market. You have not addressed the issue of how to protect the patients who are the initial victims of poor market performers. For example, the potential for modern-day thalidomide-like drug victims, a distinct possibility in a completely laissez-faire market.

Submitted by HJ on Sat, 17/03/2012 - 17:34.

Anonymous - I'm fine with that. I'm quite happy for private providers to work in parallel with the NHS with no direct public funding, just as long as its a level playing field, i.e the NHS gets no direct public funding either. The funding would go via the patient to whichever provider they preferred.

Submitted by HJ on Sat, 17/03/2012 - 17:50.

Anonymous2 - Yes, I agree that there is no absolute guarantee of quality and safety. My contention is simply that the market does it better because providers are continually forced to demonstrate their quality, efficacy and safety. Let me be clear - I'm not against inspection bodies, etc - just not statutory state ones./
As for your point about "initial poor market performers", do you not realise that thalidomide was licensed by the statutory authorities? It was a regulatory screw up./
There have been many other failures of state licensing and regulation, such as bank regulation (and contrary to the asserts of much of the left, the banks are and were highly regulated), the GMC (as Dame Janet Smith pointed out), the regulation of hospitals such as Basildon and Stafford, even Ofsted which now admits that its "satisfactory" rating for schools actually represented a standard which was anything but. State regulators are often captured by vested interests (the GMC being the classic example of an organisation which ended up being dominated by and protecting medics when it was meant to protect patients)./
The other problem with state regulation is that people suspend their own scepticism and judgement because they assume that if an organisation complies with statutory regulations then it must be "safe". The banking collapse proves this not to be the case - the banks were clearly behaving in an irresponsible way (indeed, governments were stoking a credit boom and encouraging them to behave in an irresponsible way). Had people instead been in fear of losing their money if they put it in a dodgy bank, they would have looked much more carefully at what was going on before investing. The banks would have had to demonstrate publicly that they were doing everything possible to reduce risk.

Submitted by ukcitizen on Sat, 17/03/2012 - 22:04.

Privatise the NHS and this is what the low paid/unemployed/old/disabled and other vulnerable people will face ... Or are those people in soicety to recieve the same quality of services F.O.C in all cases? .... I would like to think that Cameron and Clegg have a moral conscience and actually give a monkeys about people of limited means .... but, unfortunately, I havent seen any evidence of that .
http://www.familiesusa.org/issues/uninsured/publications/dying-for-cover...

Submitted by HJ on Sat, 17/03/2012 - 22:46.

"ukcitizen" is mistakenly conflating funding and provision - they are two separate things.
Incidentally, medical provision in the US may be largely privately provided, but that doesn't mean that there is anything like a free market in provision. Milton Friedman pointed this out long ago.

Submitted by Julie on Sat, 17/03/2012 - 23:30.

"Yes, I agree that there is no absolute guarantee of quality and safety. My contention is simply that the market does it better because providers are continually forced to demonstrate their quality, efficacy and safety."
It depends what market you're talking about, Anonymous 2. My understanding of the market proper is that there are no safety nets; if the business in question gets it wrong, it goes out of business full stop. In that situation a provider will have to continually demonstrate quality, efficacy and safety. However, this is not the kind of market we are discussing. With regard to health, we are discussing the kind of rigged market that allows private companies to make a profit from breast implants but pass the buck to the NHS when they go wrong. We are discussing the market that 'provides' cleaners in hospitals that won't actually clean up bodily fluids. We're discussing (DELETED BY MODERATORS) who announced that they wouldn't do operations on people who had co-morbidities or who they thought were a risk (by private terms). Imagine the demographic for hip and knee replacements and you'll understand what a load of use that was. I actually cannot think of a single example of private secondment in healthcare that didn't a) cost more b) reduce standards c) had to be patched up by the NHS later on at considerable expense. We are not heading towards a free market in the NHS. What is actually happening is that the NHS is going to first be asset stripped and then dismantled, because all three political parties have decided that they do not want to pay for the growing elderly population out of the public purse. That is the political reality; the free market does not come into it.

Submitted by Anonymous2 on Sun, 18/03/2012 - 00:52.

Julie, you are quoting from the post by HJ. I agree with your point of view completely (my post is above) :)

Submitted by Julie on Sun, 18/03/2012 - 17:25.

Anonymous 2,
My apologies - that's what happens when you read stuff too late at night..
I see the moderators took the bit out of my post that actually gave a specific example of this profiteering. Don't know why; it's a matter of public record and I would have thought that a debate backed up by evidence about the actual effect of private intervention in the NHS , as opposed to nebulous assertations about what it might do, would be valuable. When police armed with machine guns turn up at an NHS protest as they did yesterday, I suppose that I've got off lightly.

Submitted by HJ on Sun, 18/03/2012 - 23:24.

Julie - I think I should point out that this piece is not about the current NHS reforms. In fact, it points out their shortcomings and moves on to what should be done - i.e. the abolition of the NHS and how to go about it.
You may or may not agree, but dont attack the piece for something it is not saying or defending things it is not defending.

Submitted by Richard Wellings on Mon, 26/03/2012 - 11:56.

@Julie - If you wish to give examples then please provide a link to a reputable source. For obvious reasons, we cannot risk publishing allegations about specific individuals and firms which may be unfounded.

In any case, as HJ points out, this blog article actually criticises what might be termed the public-private partnership model and explains why it is unlikely to deliver efficiency gains. I do wish that people leaving comments would actually take the time to read and digest the post beforehand.

Submitted by Julie on Wed, 28/03/2012 - 13:03.

Richard,
Firstly, here’s some reputable sources to look up on Stracathro;
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2711195/http://news.bbc.co.uk/1/hi/scotland/tayside_and_central/8027355.stm
Secondly, I’ve been upbraided here for not sticking to the point of your article. I think this is slightly disingenuous; surely any proposal as to whether the free market is the answer to having an effective health service has to be examined in the light of how the market has performed so far in the NHS. However, I’m going to take up your challenge and give a full answer on why a free market just isn’t going to provide the kind of health service that we have come to expect .
The kind of health market you describe is based on insurance. Insurance is a sophisticated form of gambling. For example, car insurance is based on the premise that most people won’t crash. For every person that does, there’s a thousand people that don’t. And when the person crashes, you’re calculating that in most instances the crash will not be a serious one; the payout can be easily met from the premiums being paid. On the rare occasions that there is a really serious crash, you have to be sure that your risk pool is big enough to pay out. That means that companies have to be a minimum size to compete in this market; if you’re too small, you run the risk of being cleaned out if one of your clients is involved in a serious road accident and has to pay compensation.
What works for cars doesn’t work for health. First up, everyone gets ill. Sooner or later we get older, and old age does not come alone. So if we introduced the free market, people over a certain age would not get insured, or they would only get insured up to a point. They certainly wouldn’t get covered for all eventualities. This would also hold for people with chronic conditions such as diabetes, asthma, heart disease and a risk factor would be introduced for people who were overweight, who smoked or who drank too much. Basically, the only thing that private health insurance could afford to insure for would be an acute episode or an accident; everything else would be dropped. Now unless you’re advocating that people who are really ill shouldn’t be treated by the health service, this isn’t a model that you can use for health. It would end up in the fashion that you have in America; everyone still gets taxed for Medicare while paying for private insurance at the same time.
Secondly, the risk pool size is crucial. At the moment, the way the NHS is structured, the risk pool is the entire country. This makes it possible to perform complex procedures and maintain complex health services.
Let me give an example of what I mean. Supposing you have a car accident. You’re picked up by trained paramedics within five minutes of the accident and placed in an ambulance equipped with meds, defibrillator, oxygen, trauma board, heart monitor. Halfway there your heart stops and the paramedic starts it again. You are taken into the hospital’s A&E, given an MRI scan and rushed into an operating theatre where a fully qualified neurosurgeon operates on your skull to relieve pressure on the brain. While he is operating, it’s discovered that you’re bleeding out. 8 units of blood, of the correct blood type, which has been stored in the hospital’s blood bank is delivered up to the theatre. Once the operation is over and you’re out of immediate danger, you’re put in a hospital bed complete with monitors, emergency button that will call a crash team if you go into arrest again and your progress is observed by nurses trained to watch for anything going wrong. After a week or so, you get daily visits from an orthopaedic nurse to help you get upright again without damaging anything. And of course, you’re on meds, which have been checked against medical records and adjusted to account for your allergy to penicillin and your diabetic condition. Once you’re out, you have to see your GP every so often to check how you’re doing and he is given a note of all that’s been done via computer. He also has your entire medical history and knows you well, because he has been looking after your diabetic condition for the past ten years and if anyone can spot something wrong with you, it’s him.
Now just try to imagine what all of that costs, Richard. The cost of keeping medical records. The cost of medical schools and teaching hospitals to train highly skilled staff. The blood bank, the facilities to store the blood, the method of collecting the blood and testing it to make sure it’s ok. The hospital ITU with all the medical equipment; the MRI scanner, the monitors, the operating theatre. The ambulance fleet complete with paramedics. The cost of the stay in hospital. The cost of the medicines which have been checked to ensure they are up to standard. The cost of a GP who knows you so well that he can spot a medical problem with you at fifty paces. Try to imagine any private company attempting to set all of this up by itself in a free market. It’s not going to happen. No company has enough money for this by itself, not even in America. That’s why there isn’t a health system in the world that is completely free market, and if you compound that by attempting it in a country that only has 60 million people in it and they are going to be divided up into smaller units, depending on which health insurance company they pick, then it’s just all going to collapse.
Private health always has, always will, depend on the subsidy of the state to survive; it cannot hope to exist on its own. And if all it is doing in the public system is to make things more expensive and cream off a profit, then we should question its role. No one owes private companies a living. Don’t get me wrong here, Richard; I went to a private school and in some instances, the market can work. But it had its own staff, its own building and its own facilities. It didn’t borrow anything off the public system or rely on it for facilities; it was self contained. It didn’t rely on the public system in the way that BUPA relies on the NHS to deal with patients as soon as things get complicated or nasty. It isn’t our duty to provide private companies with a profit and make things more expensive for taxpayers and users of the NHS. If they have something to offer in the way of quality or value for money, then let them do it. But as I say, I haven’t seen it yet .

Submitted by Richard Wellings on Wed, 11/04/2012 - 16:10.

@Julie - Thank you for supplying the links and expounding your arguments in more detail. Let me explain why I think your critique of free-market healthcare is off the mark.

Firstly, insurance would only be one option once markets had been freed. Charitable organisations could provide treatment for those unable to afford insurance. Indeed many of Britain's most famous hospitals were founded as charitable/religious institutions in the pre-NHS era, often with money donated by generous philanthropists. Moreover, in the late 19th century a large proportion of the population obtained health cover through mutual organisations such as friendly societies. Numerous options would emerge if voluntary solutions were no longer crowded out by coercive state provision.

Secondly, I don't accept the arguments about the limitations of health insurance. Insurers can lay off risk using reinsurance markets. And there is no good reason why elderly people can't be insured - for example through long-term plans that smooth out premiums over time. Equity release schemes could also be used to fund healthcare premiums for the many asset-rich but cash-poor pensioners.

Finally, it's important to point out that funding problems in general would be diminished by the deregulation advocated in the article. Entrepreneurship and innovation would increase productivity in the health sector, making treatment more affordable.

Submitted by Susanna on Mon, 16/04/2012 - 14:42.

Richard and HJ, it sounds as if you are very worried about the NHS and that you do not have a lot of faith in it and that you don't think that any account that it works is accurate, and it sounds as if that you fear that any account from people have had a good experience of it are biased or just misinformed. It sounds as if your own experience of the NHS has been so poor that you are pretty sure that this must be the case for most people - is that right? It sounds as if your own experience has been quite formative? and that you found it impossible to get any kind of response when you tried to take some action? What kind of response did you get? It sounds as if it was not very positive for you?

Submitted by Simon Murray Wells on Mon, 16/04/2012 - 17:38.

I would add to Richard Wellings' good reply that affordability itself is increased under more generally libertarian, small-government conditions where people not only spend money - on themselves, their families, their businesses and philanthropy - more wisely than government, but owing to virtuous incentives, have more to spend on these things.
People who have lived all their lives under huge government tend to be unaware of the potential for the release of wealth for good causes. The philanthropy of America is rightly famous. The US state's eager and selfless ability to respond seriously to natural disaster anywhere in the world - a legitimate use of government - is not unconnected to where that wealth comes from and how it has historically been taxed. Tents, food and water-engineers are flown in to thousands needing help while the EU is holding meetings of bureaucrats somewhere and no-one even expects them to do anything useful quickly.
Socialism is harmful but especially to the poor and socialised medicine only the most obvious example. That mixed-sex wards exist, a dreadful outcome which should never have been imaginable, let alone actually held to be necessary, is perhaps the most depressing example of the absence of choice and coercion, though the decline in the humanity and vocation of nursing runs it close. Were these outcomes inevitable? I think a different approach would have made them both unthinkable and unnecessary.

Submitted by Julie on Mon, 16/04/2012 - 21:31.

"Charitable organisations could provide treatment for those unable to afford insurance. Indeed many of Britain's most famous hospitals were founded as charitable/religious institutions in the pre-NHS era, often with money donated by generous philanthropists."
If you thought a modern healthcare system was worth supporting Richard, you would pay for it, not rely on charity to do it for you.

Submitted by Richard Wellings on Mon, 16/04/2012 - 22:02.

@Julie - I would pay for it, but there may be some people who would benefit from charity.

Submitted by Julie on Mon, 16/04/2012 - 22:46.

There may also be some people who are low earners, but essential to our economy, who would benefit from a general taxation approach to funding healthcare as opposed to throwing them on the mercy of the parish..

Submitted by Anonymous2 on Tue, 17/04/2012 - 00:34.

@Richard, Hello
I have just a few comments in response to your most recent post.
In order to decide whether your market based scenario for health care provision will work, I think we need to take a step back and look at what the ultimate aim is. The best result is universal coverage provided on the basis of need, not ability to pay. The assumption which underpins this is that health care is a human right and should be accessible to all.
While it is certainly not perfect, the government-provided socialist, and as you note at the beginning of your article, strongly supported NHS provides peace of mind in the form of universal coverage and comprehensive health care. Moreover, this is done at a low cost relative to what other countries pay (especially the US which pays almost 20% of GDP for its health care, and still does not cover everyone).
In contrast, your scenario relies on the vagaries and uncertainties of the free market. In an ideal and perfect world, customer-focused companies would provide top quality health care to fully informed consumers at affordable prices. However, the reality, as every economist knows, is that this perfect world of markets does not exist. Companies exist to make money. Serving the customer can come a distinct second to this objective. To take your health insurance examples, the first thing to note is that insurance companies are not *required* to do any of these things. They are examples only of what is possible. As Julie notes, insurance companies can and do exclude the elderly and people with chronic illness or pre-existing conditions. They also engage in a practice called "recission" which is the cancellation of a policy for an alleged failure to disclose a pre-existing condition. This is often done on extremely flimsy grounds once the insured has developed an expensive medical condition, sometimes in the middle of treatment. This situation is well-documented in the US.
People unable to pay for insurance would have to hope that a charity would be available to provide care for their particular illness. The NHS was created precisely so that we would no longer have to rely on the kindness of strangers. That is why it enjoys the strong support of the populace.

Submitted by Philip on Tue, 17/04/2012 - 10:09.

Are we not in danger of conflating two (or three) issues here. There is, on the one hand, the issue of whether taxpayers should pay for health care in general; secondly, there is the issue of who should provide healthcare; thirdly, there is the issue of whether - if it is believed that most people should pay for much of their healthcare (through saving, insurance, co-payments etc) - whether the state should pay for the healthcare of the poor. In almost every developed country in the world the state finances healthcare either for everybody or the less well off but does not actually provide all or the vast majority of healthcare. Canada and the UK are exceptions - and I am afraid that the results are not good. Very often the false dichotomy of the US versus the UK system is put forward. In the US the government spends more or less the same as in the UK in a highly regulated and hugely distorted system. It is not a model that anybody would copy. Most models in western europe and Asia have considerable private provision and/or private finance. I would suggest that a move to much greater private provision would be hugely beneficial. It would also be beneficial to have much more private finance. Without that, you will never overcome the moral hazard problems (that are leading the government down an ever-more paternalistic route in other policy areas) and you will not get innovation in provision and finance. I am afraid, Julie, that your description of car insurance and its comparison with health insurance is a little wide of the mark. Insurance is not a sophisticated form of gambling at all. And you say that everybody gets ill. Does everybody not die? But, have we not had life insurance for 300 years? Some kinds of insurances provide packages of services as their benefit too (as you would expect with health) - some provide cash sums, some provide indemnity, some provide the service itself. It is certainly necessary to have an insurance market (at least for larger risks) that involves level premiums for increasing risk, but saving should have a role to play as well - especially for end of life risks. We can be more imaginative. In answer to the person who asks if those of us who do not agree with the NHS have had bad experiences, let me say this. I disapproved of the NHS long before I had any experience of it at all. Since having children, the experiences have been awful - normally at the human level but sometimes at the medical level. I currently have a relative with serious osteoporosis and several other complaints. She discharged herself from a leading hospital (having to take somewhat dangerous oxygen tanks home with her) because she was in permanent agony because she was only allowed one pillow and could not sit properly ("one pillow per patient" she was told) and, of course, because of the risk of infection you can't take your own in. The medical care is somewhat "iffy" too, but then the combination of problems is complex, so I am putting that to one side. The impression is given that, after 60 years of the NHS we would not have healthcare without it. The experience of all developed countries in the world - as well as the period before 1947 in the UK - is that we would. Remember what happened in 1947. There was a desire to "fill in the gaps", "build on existing systems" and so on - that is what Beveridge wanted. Healthcare for males in work (and often their families) was pretty good - but there were gaps, that is true. Bevan came in and effectively nationalised the whole system from top to bottom. Was Beveridge wrong? Are nearly all other countries in the world wrong? Or was the person who nationalised everything from steel to power, to the Bank of England to healthcare wrong? It is dangerous to judge the validity of an argument by the number of its proponents but I think that Bevan was very, very wrong.

Submitted by Susanna on Wed, 18/04/2012 - 16:00.

Philip, it is worrying to hear that your family is not having a good experience of the NHS and that your experience of it exactly matches your expectations that you said were pretty low before you encountered it.
It sounds as if the NHS had a bad press for you before you first encountered it so it must have been alarming to have to use it. It sounds as if you felt that you were not getting anywhere - you wrote that the medical care was "iffy" too and not up to standard so it sounds like you have lost any confidence or trust? It makes sense that you think as you do, if that has been your only experience of the NHS.
It is worrying that not enough pillows were not provided. I hope that your relative is doing better.

Submitted by Susanna on Wed, 09/05/2012 - 00:39.

I rang my local hospitals and they said that patients are allowed lots of pillows.
My mother had lots of pillows. I am a bit confused by what you wrote.